Earlier this month, the Federal Deposit Insurance Corporation (FDIC) issued cease-and-desist letters to a cryptocurrency exchange and a fintech, demanding that each of these entities immediately stop making false and misleading statements about FDIC coverage of their financial products. The FDIC also issued cease and desist letters to two marketing websites, demanding that they remove false and misleading statements about FDIC insurance coverage with respect to the cryptocurrency exchange.… Continue Reading
FDIC Enforcement
OCC and FDIC issue proposed rules to undo Madden
By Ballard CFS Group on
The OCC and FDIC issued proposed rules this week intended to eliminate the uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding. In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not charge the same rate of interest on the loan that Section 85 of the National Bank Act (NBA) allowed the national bank to charge. … Continue Reading
FDIC RESPA Section 8 Settlement Acknowledges Legitimacy of Marketing Arrangements
By Richard J. Andreano, Jr. on
HomeStreet Bank recently agreed to the issuance of an order to settle an allegation by the FDIC that the bank’s discontinued Home Loan Center-based mortgage business line violated the Real Estate Settlement Procedures Act (RESPA) “by entering into co-marketing agreements using online platforms and desk rental agreements that resulted in the payment of fees to real estate brokers and home builders for their referrals of mortgage loan business.”… Continue Reading
D.C. district court allows payday lenders’ due process claims to proceed against “Operation Choke Point”
By Daniel C. Fanaselle on
On July 5, 2017, the U.S. District Court for the District Columbia, in the lawsuit filed in 2014 challenging “Operation Choke Point” — a federal enforcement initiative involving various agencies, including the Consumer Protection Branch of the Department of Justice (DOJ), the Federal Depository Insurance Corporation (FDIC), the Federal Reserve (Fed), and the Office of the Comptroller of the Currency — denied the agencies’ motions to dismiss and/or for summary judgment and permitted the payday lender-plaintiffs’ due process claims to proceed.… Continue Reading
FDIC announces settlement with bank and non-bank affiliated parties
By Scott M. Pearson on
Posted in FDIC Enforcement, Regulatory and Enforcement
The FDIC announced last week that it had entered into settlements with Bank of Lake Mills and two non-bank “institution-affiliated parties” through which the bank originated loans for allegedly engaging in unfair and deceptive practices in violation of Section 5 of the FTC Act. The settlements should serve as a reminder to non-banks entering into arrangements with FDIC-supervised banks that they can become subject to FDIC enforcement authority.… Continue Reading